Merkel claimed it is a "show of strength;" foreign newspapers called it an example for other European nations to follow; unions said it was unfair to the poor; and far-left opposition leader Gregor Gisy likened it to an "assault on social peace and democracy" -- the new German austerity package, the largest in the country's post-war history, sparked praise as well as criticism.

Acknowledging it was imperative that Europe's largest economy can rely on "solid finances," Merkel Monday unveiled a program that will cut a total of $95.4 billion in public spending through 2014.

"I think recent months have shown, in the case of Greece and other eurozone countries, how extraordinarily important solid finances are -- they are basic conditions for stability and prosperity, that the economy can function and that unemployment can be reduced," Merkel told reporters in Berlin. "These are serious times, these are difficult times."

Germany is required by law to lower its debt to less than 0.35 percent of gross domestic product by 2016 and is thus under pressure to reduce spending. Its net borrowing in 2010 soared to more than $100 billion, the highest post-war value. With the recent Greek debt crisis in mind, Germany is eager to control its finances, despite the fact that many analysts say it should keep spending money to fuel the economy on its road out of the recession.

Berlin next year will start with cutbacks of $13.4 billion, which will rise to $20.5 billion in 2012, $30.8 in 2013 and $38.8 billion in 2014.

Merkel's conservative government of Christian Democrats and Free Democrats, two business-friendly parties popular with the affluent, tabled the program after two days of intense talks. The FDP, under Foreign Minister Guido Westerwelle, rejected calls to raise taxes and instead convinced Merkel to go for major cuts to Germany's social security system, including cuts to welfare benefits.

The austerity package will also trim the country's armed forces by 10,000-100,000 troops, cut 10,000 federal jobs and impose a special tax on the country's nuclear power industry in return for longer running times for the country's reactors.

Officials from the opposition Social Democrats, the Green Party as well as the Left Party said the measures leave the rich untarnished and punish the unemployed, families and the poor.

Michael Sommer, the chairman of the German trade union federation DGB, sharply criticized the program for its "lack of prospects" and "social imbalance."

"The government waives the possibility of highly necessary additional income just to comply with the FDP taboo on fiscal policy," said Sommer. "There is no wealth tax, no sensible inheritance tax, as well as no raising the top income tax rate and no cuts for those who actually caused the crisis," Sommer said. "This is a government for the rich."

Merkel's coalition is under increasing pressure. It suffered a devastating defeat in a state election last month that resulted in Merkel losing her majority in the upper house of parliament.

In late May, a leading conservative, Roland Koch, resigned as the state premier of Hesse. A few days later, on June 1, Germany's President Horst Koehler, pushed into the job by Merkel and Westerwelle, also resigned surprisingly.

The opposition's candidate to succeed Koehler, Joachim Gauck, a former civil rights leader from eastern Germany, is popular with voters all over the country. Merkel's candidate, Christian Wulff, is a pure party politician and not seen as representing all Germans.

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